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April 28, 2010 12:46 PM
Pontiac gains $1.5 million from insurance stock, new management for golf course
By Chad Halcom
The City of Pontiac could see a budget windfall of more than $1.5 million this fiscal year from the sale of recently found stock shares and a new management contract for the Pontiac Municipal Golf Course.
Pontiac Emergency Financial Manager Fred Leeb reported this week the city has selected Torre Golf Management, an affiliate of Pontiac-based landscaping firm Torre & Bruglio Inc., to manage day-to-day operations, concessions and grounds maintenance at the course.
A recent review of the city's insurance files uncovered that Pontiac owned 43,000 shares of Des Moines, Ia.-based Principal Financial Group Inc. (NYSE: PFG). City officials were previously unaware of the asset and it wasn't mentioned in other recent financial statements, Leeb said in a statement.
The city had selected Troy-based McGraw Wentworth as its insurance agent of record in 2009.
Leeb, president of Orchard Lake-based turnaround firm Fred Leeb & Associates L.L.C., was appointed emergency financial manager for the city in March 2009 when Pontiac was struggling with a $7 million budget deficit.
Leeb had the PFG stock sold at a price of $29.17 per share, for a return of $1.26 million received this week by the city.
“This is a terrific example of the work that is being done by members of our staff to address the financial emergency plaguing Pontiac,” Leeb said in a statement.
The contract with Torre Golf Management also relieves the city from subsidizing a loss margin in the municipal golf course out of its general fund budget. The course operated at a $330,000 loss last year and has averaged a loss of $250,000 over the past 10 years.
Torre, which has had contracts to manage Inkster Valley Golf Club and Dearborn Heights-based Warren Valley Golf Club since 2005, will manage the city-owned course for Pontiac and make a guaranteed payment to the city out of its gross operating revenue.
“We are pleased that the City of Pontiac has given us an opportunity to manage this fine course,” Torre President and CEO Frank Torre said in a joint statement with Leeb.
“Our mission here, as always, is to provide the highest quality playing condition, exceed our customer's expectations while, at the same time, maximizing revenue for our client.”